KRE, the KBW Regional Banking ETF, has had an incredible run since October of 2011.? Since printing below 20 in late September 2011 the stock has near doubled.
Today, a customer who was likely long the underlying bought 11,100 KRE Jan 2014 29 puts paying 1.42.? While it might appear to be bearish, this purchase, as a hedge actually points toward continued bullishness in the stock.
The IV is actually quite low in KRE, along with just about every other stock. This trade is basically an in the money call, one that gets to collect the dividend.? A call might not be a bad way to piggyback this customer.? The Jan 2014 32 calls are trading below 20% IV, this is historically well below the mean.